Plastics industry conducts research and development to create innovative products that can meet technological requirements of market. The production of such products can easily attract Research Grants or SR&ED Tax Incentives. Similarly Mould and Die and other tools which can be sold after manufacturing certain products also fall in the category of SR&ED eligible projects. Examples of such projects are injection moulding machines, presses used for moulding and extrusion, blow moulding or injection mounding of plastic or metallic parts such as railway carriages, boat hulls, plastic tanks, aluminum profiles. Moulds are usually developed to create products with specific and unique features. Mould makers take orders and create custom build Mould and Die. They must develop moulds keeping the required technology in mind. Most of the time, the relationship between mould makers and their customers depends and vary upon the skills of mould makers and need of customers. The ownership of the Mould and Die design determines how mould maker, customer or both can claim SR&ED expenses. Usually mould shops have minimum 10 and maximum 100 highly trained and qualified experts. These professionals posses experience and skills in specific areas of work such as metallurgy, plastics, pneumatics, electronics, hydraulics and thermal management. They are named mould makers, CNC operators, EDM operators etc, depending upon their areas of specialization.
Although the SR&ED is not guaranteed during the production, but the following are qualification indicators for a mould and die maker company for Tax Incentives:
- The mould is built only for experimentation and will not be sold. Often such moulds are made with softer materials, the plastic parts may be removed manually or the mould may contain only one cavity in what will eventually be a multi-cavity mould.
- The mould is built with a new material.
- The mould is built with special mechanisms or instrumentation.
- The mould is built using new tooling methods, or it is complex and involves many mould functions. It is not certain that the mould will function as intended.
- The mould will be used with a new resin or formulation compound that places special demands on it.
Because of uncertainties mentioned above in the article during mould making, documentation of work done is always mandatory to support SR&ED eligibility. If you have any further questions about eligibility and your specific situation, feel free to contact Kelid™ for helpful advice. If you have a question that you feel can help other people in similar situations, leave a comment below.